Enterprise Strongly Supports the Affordable Housing Bills Introduced by Sen. Cantwell and Rep. Tiberi

WASHINGTON, Dec. 15, 2011 /PRNewswire/ -- Enterprise, a national leader in the affordable housing and community development industry, strongly supports the Low Income Housing Tax Credit (Housing Credit) legislation introduced today by Senator Maria Cantwell (D-Wash.) and Representative Pat Tiberi (R-Ohio).  Senate bill 1989 and House Resolution 3661 will promote stability and certainty for affordable housing development through improved efficiencies in the Housing Credit– the most successful affordable housing production and preservation tool in U.S. history.

"Affordable housing continues to be a major concern and challenge across our nation and here in Washington state," Sen. Cantwell said in August. "By helping to spur investment in affordable housing development, we stimulate our local economy and lessen the impact of the tough economic times on our most vulnerable populations. This bill will help projects move forward that provide much-needed homes for Washington families and create construction jobs."

A temporary provision in the Housing and Economic Recovery Act of 2008 (HERA) allowed state housing agencies to underwrite new construction and substantial rehabilitation for 9 percent Housing Credit projects that are placed-in-service through 2013. Since then, this provision has instilled stability and certainty in the Housing Credit as it reduced financial risks for owners and investors, and simplified the states' administration of the program.

The establishment of a minimum rate has made the Housing Credit more efficient and effective at providing affordable homes for low-income families throughout the nation. The temporary HERA provision ensured that the optimum amount of private equity capital was available in the financing of Housing Credit developments, which in turn lessened the burden on government funding resources. Building on the proven success of the temporary HERA measure, this legislation includes two provisions.

• First, it would make permanent the successful HERA provision, improving the efficiency of the program and ensuring long-term stability and certainty for private investors. If this provision is enacted in early 2012, it will prevent a large disruption in the affordable rental housing development pipeline.
• Second, the legislation would extend the impact of the first provision by applying the same policy to all allocated Housing Credits. As the affordable housing stock continues to deteriorate, it is important for developers and investors to have a stable acquisition financing tool such as the 4 percent Housing Credit to preserve affordable rental homes for low-income families.

"Enterprise commends Senator Cantwell and Representative Tiberi for their leadership and strongly encourages Congress to swiftly enact these provisions," said Ron Terwilliger, chairman of Enterprise. "Without the provisions, affordable housing developments could experience a reduction of 15-20 percent in essential private equity. This would likely have a negative impact on the number and types of families served, as many of the proposed affordable housing projects will no longer be financially feasible."

Since its inception as part of the Tax Reform Act of 1986 that was signed into law by President Reagan, the Housing Credit has leveraged more than $75 billion in private capital through public-private partnerships to help finance over 2.4 million affordable rental homes. This development activity generates revenue for localities, promotes economic growth, and supports approximately 95,000 jobs a year.

Sen. Cantwell's and Rep. Tiberi's bills are based on national consensus Housing Credit proposals supported by more than 330 national, state and local stakeholder organizations working together as part of the Affordable Rental Housing A.C.T.I.O.N. (A Call To Invest in Our Neighborhoods) Campaign. For more information on the campaign, log on to www.rentalhousingaction.org.

Enterprise is a leading provider of the development capital and expertise it takes to create decent, affordable homes and rebuild communities. For nearly 30 years, Enterprise has introduced neighborhood solutions through public-private partnerships with financial institutions, governments, community organizations and others that share our vision. Enterprise has raised and invested more than $11 billion in equity, grants and loans to help build or preserve more than 280,000 affordable rental and for-sale homes to create vital communities. Visit www.enterprisecommunity.org and www.enterprisecommunity.com to learn more about Enterprise's efforts to build communities and opportunity.

SOURCE Enterprise